The
Federal Financial Institutions Examination Council (FFIEC) today announced the
availability of data on mortgage lending transactions at 6,913 U.S. financial
institutions covered by the Home Mortgage Disclosure Act (HMDA). Covered
institutions include banks, savings associations, credit unions, and mortgage
companies. The HMDA data made available today cover 2015 lending activity and
include:

applications,
originations, purchases and sales of loans, denials, and other actions related
to applications

whether
a loan is subject to the Home Ownership and Equity Protection Act (HOEPA)

whether
a loan is secured by a first or subordinate lien, or is unsecured

The
data released today also include disclosure statements for each financial
institution, aggregate data for each MSA, nationwide summary statistics
regarding lending patterns, and Loan/Application Registers (LARs) for each
financial institution (LARs are modified to protect borrower privacy). The
FFIEC prepares and distributes this information on behalf of its member
agencies.

Understanding the Data

The
2015 HMDA data use the census tract delineations, population, and housing
characteristic data from the 2010 Census and the combined 2006–2010 American
Community Surveys, as has been the case since 2012, when these delineations and
data were first
used. In
addition, the data reflect metropolitan statistical area (MSA) definitions
released by the Office of Management and Budget in 2013 that became effective
for HMDA purposes in 2014.

Caution
should be used when comparing HMDA data across multiple years for specific
geographic areas due to the changes in MSA and census tract boundaries and
updates to the population and housing characteristics of census tracts.

The
HMDA data are the most comprehensive publicly available information on mortgage
market activity. Among other uses, the data help the public determine how
financial institutions are serving the housing needs of their local
communities, and facilitate fair lending and compliance examinations. When
examiners evaluate an institution’s fair lending risk, they analyze HMDA data
in conjunction with other information and risk factors, in accordance with the
Interagency Fair Lending Examination Procedures available at http://www.ffiec.gov/PDF/fairlend.pdf.

The
current HMDA data alone cannot be used to determine whether a lender is
complying with fair lending laws. The data do not include many potential
determinants of loan application and pricing decisions, such as the applicant’s
credit history, debt-to-income ratio, the loan-to-value ratio, and other
considerations. Therefore, when examiners conduct fair lending examinations,
including ones involving loan pricing, they analyze additional information
before reaching a determination about an institution’s compliance with fair
lending laws.

Observations from the 2015 Data

For 2015, the number of reporting
institutions declined about 2.5 percent from the previous year to 6,913. While
there were some new reporters in 2015, this number was more than offset by the
number of institutions that reported in 2014 but did not do so in 2015. In most
cases, this is because of mergers and acquisitions.

The 2015 data include information on 12.1
million home loan applications, of which 7.4 million resulted in loan
originations, and 2.1 million in purchased loans, for a total of 14.2 million
actions. The data also include information on approximately 531,000 requests
for preapprovals for home purchase loans.[1]

The total number of originated loans of all
types and purposes increased by 1.4 million between 2014 and 2015, or 22
percent. Refinance originations increased by 36 percent, and home purchase
lending increased by 13 percent.[2]

From 2014 to 2015, the share of 1–4 family
home purchase loans made to low- and moderate-income borrowers (those with
income of less than 80 percent of area median income) rose slightly from approximately
26 percent in 2014 to roughly 27 percent in 2015, while the share of refinance
loans to low- and moderate-income borrowers decreased from 24 percent to 22
percent.[3]

In terms of borrower race and ethnicity, the
share of home purchase loans for 1–4 family properties made to black borrowers
rose from 4.9 percent to nearly 5.2 percent, the share made to Hispanic-white
borrowers rose from 7.5 percent to 7.9 percent, and those made to Asian borrowers
declined slightly from 5.7 percent to 5.5 percent. The share of refinance loans
made to black borrowers decreased from 5.2 percent to 4.9 percent, the share
made to Hispanic-white borrowers rose slightly from 6.0 percent to 6.1 percent,
and those made to Asian borrowers rose from 4.5 percent to 5.1 percent.

In 2015, black and Hispanic-white applicants
experienced higher denial rates for conventional home purchase loans than
non-Hispanic white applicants. The denial rate for Asian applicants is more
comparable to the denial rate for non-Hispanic white applicants. These
relationships are similar to those found in earlier years and do not take into
account potential differences in risk characteristics across demographic
groups.

In 2015, the FHA-insured share of first-lien
home purchase loans for 1–4 family, site-built owner-occupied properties increased
to 25 percent from 21 percent in 2014, reversing a downward trend in the FHA’s
market share since 2009. The VA-guaranteed share of such loans remained at approximately
10 percent in 2015. The overall government-backed share of such purchase loans,
including FHA, VA, RHS and FSA loans, was 39 percent in 2015, increasing from
37 percent in 2014, but down from 54 percent in 2009. One reason for the rise
in the FHA’s market share may have been that the FHA significantly reduced its
annual mortgage insurance premiums by 0.5 percentage points in January 2015 for
loans with terms greater than 15 years.

The FHA-insured share of first-lien refinance
mortgages for 1–4 family, site-built owner-occupied properties also increased
in 2015, to about 14 percent from 9 percent in 2014, while the VA-guaranteed share
of such refinance loans decreased by approximately 1 percentage point to 9
percent.

The 2015 HMDA data also include information
on loan pricing for loans classified as “higher-priced.” Higher-priced loans
are defined as loans with annual percentage rates (APRs) that exceed the
average prime offer rates (APORs) by at least 1.5 percentage points for
first-lien loans and at least 3.5 percentage points for subordinate lien loans.[4] The data on the incidence of higher-priced
lending shows that nearly 6 percent of first-lien loans originated in 2015 have
APRs that exceed the loan price reporting thresholds, down from nearly 8
percent in 2014.

About 22 percent of the FHA’s first-lien home
purchase loans had APRs above the reporting threshold for higher-priced loans, significantly
down from 45 percent in 2014.[5] As
discussed earlier, the FHA lowered its annual mortgage insurance premiums in
2015, which had a direct effect on the APRs of FHA loans, because the APR
includes the cost of mortgage insurance.

As noted above, the HMDA data identify loans that
are covered by HOEPA. Under HOEPA, certain types of mortgage loans that have
interest rates or total points and fees above specified levels are subject to certain
requirements, such as additional disclosures to consumers, and are also subject
to various restrictions on loan terms. For 2015, 1,249 loan originations
covered by HOEPA were reported: 494 home purchase loans; 186 home improvement
loans; and 569 refinance loans.

Financial
institutions are required to make their disclosure statements available at
their home offices. For other MSAs in which financial institutions have
offices, an institution must either make the disclosure statement available at
one branch within each MSA or provide a copy upon receiving a written request.
Questions about a HMDA report for a specific institution should be directed to
the institution’s supervisory agency at the following phone numbers:

The FFIEC was established in March 1979 to prescribe uniform principles, standards, and report forms and to promote uniformity in the supervision of financial institutions. It also conducts schools for examiners employed by the five federal member agencies represented on the FFIEC and makes those schools available to employees of state agencies that supervise financial institutions. The Council consists of the following six voting members: a member of the Board of Governors of the Federal Reserve System; the Chairman of the Federal Deposit Insurance Corporation; the Director of the Consumer Financial Protection Bureau; the Comptroller of the Currency; the Chairman of the National Credit Union Administration; and the Chairman of the State Liaison Committee.

[2] The increases are measured by comparing the 2015 public HMDA data with the 2014 data that include both the 2014 public data and data from a small number of reporters whose submissions were not incorporated into the 2014 HMDA data until after the public dataset was finalized. Green Tree Servicing, LLC’s 2014 HMDA submission of approximately174,000 transactions make up nearly all of the transactions from these reporters. Green Tree Servicing, LLC’s 2014 HMDA data are available at http://www.ffiec.gov/hmda/greentree.htm.

[3] Many refinance loans are “streamlined refinances” and data on borrower income are not typically collected for such loans. In turn, such refinances do not contribute to the estimates for low- and-moderate income borrowers’ share of refinance activity. For data on the fraction of loans with missing income, see forthcoming, “Residential Mortgage Lending from 2004 to 2015: Evidence from the Home Mortgage Disclosure Act Data” Federal Reserve Bulletin, https://www.federalreserve.gov/pubs/bulletin/2016/pdf/2015_HMDA.pdf.

[5] Nonetheless, the higher-priced fraction of FHA loans is still high by historical comparison. One important factor raising the APRs on FHA loans is the requirement, introduced in June 2013, that annual mortgage insurance premiums be paid for the life of the loan.